ROTERDAM, June 21 -- Theories of honesty make different predictions about the role of material incentives. Classic economic models based on rational self-interest suggest that, all else equal, honest behavior will become less common as the material incentives for dishonesty increase. Models of human behavior that incorporate altruistic or other-regarding preferences also predict dishonesty to rise with increasing incentives, as self-interest virtually always dominates concerns for the welfare of others—we care about others but not as much as we care about ourselves. As a result, self-interest will play an increasingly prominent role in behavior as the material incentives for dishonesty grow. Psychological models based on self-image maintenance predict that people will cheat for profit so long as their behavior does not require them to negatively update their self-concept. However, it is unclear ex ante whether self-image concerns will become more or less important as the incentives for dishonesty increase, and what form that relationship will take. A further complication is that most of the experimental literature on honest behavior involves modest financial stakes, has been conducted in laboratory settings (where people understand their behavior is being observed), and tends to rely on populations from Western, educated, industrialized, rich and democratic societies. We conducted a series of large-scale field experiments across the globe to examine how financial incentives influence rates of civic honesty. We turned in “lost” wallets and experimentally varied the amount of money left in the wallets, allowing us to determine how monetary stakes affect return rates across a broad sample of societies and institutions. Our experiments take inspiration from classic “lost letter” studies that examine behavior in naturalistic settings but also provide tighter experimental control than past studies. We visited 355 cities in 40 countries and turned in a total of 17,303 wallets. We typically targeted the five to eight largest cities in a country, with roughly 400 observations per country. Wallets were returned to one of five societal institutions: (i) banks, (ii) theaters, museums, or other cultural establishments, (iii) post offices, (iv) hotels, and (v) police stations, courts of law, or other public offices. These institutions serve as useful benchmarks because they are common across countries and typically have a public reception area where we could perform the drop-offs. Our wallets were transparent business card cases, which we used to ensure that recipients could visually inspect without having to physically open the wallet (fig. S1). Our key independent variable was whether the wallet contained money, which we randomly varied to hold either no money or US $13.45 (“NoMoney” and “Money” conditions, respectively). We used local currencies, and to ensure comparability across countries, we adjusted the amount according to each country’s purchasing power. Each wallet also contained three identical business cards, a grocery list, and a key. The business cards displayed the owner’s name and email address, and we used fictitious but commonplace male names for each country. Both the grocery list and business cards were written in the country’s local language to signal that the owner was a local resident. After walking into the building, one of our research assistants (from a pool of eleven male and two female assistants) approached an employee at the counter and said, “Hi, I found this [pointing to the wallet] on the street around the corner.” The wallet was then placed on the counter and pushed over to the employee. “Somebody must have lost it. I’m in a hurry and have to go. Can you please take care of it?” The research assistant then left the building without leaving contact details or asking for a receipt. Our key outcome measure was whether recipients contacted the owner to return the wallet. We created unique email addresses for every wallet and recorded emails that were sent within 100 days of the initial drop-off. Complete methods and results, including additional robustness checks such as testing for experimenter effects, can be found in the supplementary materials. As shown in the left half of Fig. 1, our cross-country experiments return a remarkably consistent result: citizens were overwhelmingly more likely to report lost wallets with money than without. We observed this pattern for 38 out of our 40 countries, and in no country did we find a statistically significant decrease in reporting rates when the wallet contained money. On average, adding money to the wallet increased the likelihood of reporting a wallet from 40% in the NoMoney condition to 51% in the Money condition (P < 0.0001). This result holds when controlling for a number of recipient and situational characteristics (table S8). Furthermore, while rates of civic honesty vary substantially from country to country, the absolute increase in honesty across conditions was stable. As shown on the right half of Fig. 1, the average treatment effect is roughly equal in size across quartiles based on absolute response rates.
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